My colleague holds more than a couple of dozen ETH. Every time the market moves, it scrapes the K-line, yet he’s afraid to touch options because he doesn’t want to get liquidated. Later, he tried an options treasury with @TermMax as the premium vault: he deposited the ETH into the system, and it automatically runs a covered call strategy. Every week, he sells out-of-the-money call options to collect the premium. The annualized return is roughly an extra 6% to 12%. This return depends on the strike price and the expiration date—when the market stays steady, the premium is thinner; when volatility spikes, he can pick up cheaper options premiums. If the price rises above the strike price, the ETH may be called away and sold, but the premium collected is like trimming risk at a higher level—overall it’s much more comfortable than just waiting endlessly to get back to breakeven.
The biggest problem with on-chain options used to be that liquidity was too fragmented, and the bid-ask spreads were absurd. TermMax uses a fixed-tenor order book plus AMM market making to narrow the bid-ask spread to an acceptable range. Options themselves can also be transferred, so you don’t have to just sit there and wait until expiry. My colleague says that now, when the market drops, the premium cushions the downside; when the market rises, he accepts the strike being exercised. Somehow it feels more secure in his mind. If on-chain tools can lower the threshold for hedging to this level, is holding spot through volatility a matter of faith—or just laziness?
#termmax
The biggest problem with on-chain options used to be that liquidity was too fragmented, and the bid-ask spreads were absurd. TermMax uses a fixed-tenor order book plus AMM market making to narrow the bid-ask spread to an acceptable range. Options themselves can also be transferred, so you don’t have to just sit there and wait until expiry. My colleague says that now, when the market drops, the premium cushions the downside; when the market rises, he accepts the strike being exercised. Somehow it feels more secure in his mind. If on-chain tools can lower the threshold for hedging to this level, is holding spot through volatility a matter of faith—or just laziness?
#termmax